Proposal Mistake #1–Relying on a Reactive Sales Strategy

You’ve been given an assignment to procure an important product or service for your company. Something that people in your company rely on. Something they need in order to do their jobs. You have been given access to funds to acquire that product or service, but you’ve also been encumbered with the responsibility to use those funds well and in the best interest of the company.

Now ask yourself these three questions:

Would you invest company funds on a high cost product or a mission critical service based solely on what you read in a proposal—on a piece of paper? I certainly wouldn’t.

Would you invest your company’s resources by awarding a major contract to a company if you didn’t know or hadn’t met the principle people involved in delivering the product? I certainly wouldn’t.

Would you put your own reputation at risk—and potentially even your job—by choosing a vendor that may or may not be able to deliver the promises they make in their proposal? I certainly wouldn’t.

As an employee with a fiduciary responsibility to do what is in my company’s best interest, I would never invest funds or resources, or put my own reputation or career at risk, by selecting a vendor or supplier based solely on what I read in a proposal they submitted. It’s just not sensible. Or reasonable. Companies can look great on paper, they can say anything they want in a proposal, but unless I had the opportunity to meet them, to get to know them, to evaluate their ability to deliver what they promise, how can I possibly have any confidence in their ability to actually deliver on that promise.

To sell well, think like a buyer

What is important for sellers to understand is that this is not a minority opinion. To the contrary, the vast majority of buyers the world over share this very reasonable view. If you are honest with yourself, you probably share this view, as well; virtually all buyers are hesitant to buy from a company they don’t know. You may have the best price, the coolest proposal, the most awesome product—but if I don’t know you, the risk is just too great.

Despite this, when we respond to RFPs that we receive ‘out of the blue,’ where we have no relationship with the client prior to receiving their RFP, this is exactly what we are hoping will happen. We hope that the words we put on paper will somehow be compelling enough that they choose us over everyone else, even though they’ve never met us before and even though they have no real idea whether or not we can actually deliver what we promise. But in the very wise words of author Rick Page, hope is not a strategy. More to the point, “hope” is not a currency on which you can run a business.

The fact is simple and straight forward; responding to an RFP received ‘out of the blue,’ from a company we haven’t worked with before the RFP was issued, is a waste of time. In his book, Persuasive Business Proposals, author Tom Sant illustrates this point with exceptional clarity: “One of the Big Four consulting firms found that the single factor most predictive of a successful proposal was the existence of a strong relationship with the customer.” He went on: “If there was not, the win ratio was below 10 percent.”

If you don’t have a relationship with the client before the RFP is issued, it is unlikely you are going to win. Perhaps even more telling, you don’t even know how bad your chances are.

The bottom line

Sellers must abandon the belief that buyers will choose a vendor based solely on the proposals we write. If you respond to an RFP you received ‘out of the blue,’ without any prior contact with the buyer, you are most likely going to lose.

There are exceptions, of course—there are always exceptions. I always encounter people in my classes or seminars who win one RFP out of the tens or even hundreds to which they respond, and based on this experience, they conclude RFPs received ‘out of the blue’ are winnable.

But in the vast majority of cases, you are not going to win. Believe it. Accept it. Embrace it. If you receive an RFP, and you have had no previous interaction with the buyer, you are likely going to lose.

Sellers who want to win more of the RFPs to which they respond, on a more regular and consistent basis, must reject the reactive sales strategy and replace it with a proactive sales strategy. Said another way, we have to start selling again.

David Seibert is a professional salesperson, proposal writer, and proposal consultant. He is also the founder and president of The Seibert Group, a proposal consulting and training organization serving businesses that sell to other businesses and to state and local governments. You can contact him at dseibert@persuasionselling.com.